Nope, it’s not accounting with friends. Social accounting has to do with incorporating social and environmental impact into traditional financial accounting. It is related to the triple bottom line that has been espoused by many social entrepreneurs and socially innovative companies.In corporate culture, social accounting is closely connected to corporate social responsibility (CSR).Defining Social Accounting

Social accounting is first and foremost accounting. Similar to traditional accounting, it is a method of quantifying a company’s performance. Only with social accounting, performance is used broadly to include social and environment effects.

“Social accounting is a type of accounting that a business performs to place a value on the influence its operations have on society. It requires that enterprises look closely at all that it does and what kind of impact its activities have on people, places, and the environment….[it also] stems from the demand from governments and the public that businesses be more transparent concerning activities and the implications of those activities.”

Beyond Definition

The challenge with social accounting comes at the stage beyond definition. How do you actually factor in environmental and social effect in a traditional accounting scheme? How do you make a particular method of social accounting widely accepted? How do you ensure that it won’t be ‘gamed’ so that companies can appear more socially responsible?

These are questions that will be explored, keep checking back for more.

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